An investment firm offers three types of equity investments,

A, B, and C. Of the firm's clients, 30% invest in A, 50% invest

in B, and 20% invest in C. The rates of return are 10%, 6%,

and 7% for A, B, and C, respectively. What is the expected

value of the total return rate for the firm's clients?

6.2%

7.1%

7.4%

8.2%

7.1

Step-by-step explanation:

A, B, and C. Of the firm's clients, 30% invest in A, 50% invest in B, and 20% invest in C. The rates of return are 10%, 6%, and 7% for A, B, and C, respectively. 7.1 plato

The expected value of the total return rate for the firm's clients is C. 7.4%

Step-by-step explanation:

1. Let's review all the information given for solving the question:

Type of equity investments = A, B and C

Percentage of investment in each type of equity = 30% in A, 50% in B and 20% in C.

Rates of return of each type of equity investment = 10% for A, 6% for B and 7% for C.

2. Let's find the expected value of the total return rate for the investment firm:

Return rate for each type of investment = Percentage of investment * Rate of return

For A = 30% * 10% = 0.3 * 0.1 = 0.03

For B = 50% * 6% = 0.5 * 0.06 = 0.03

For C = 20% * 7% = 0.2 * 0.07 = 0.014

Total return rate = Return rate for A + Return rate for B + Return rate for C

Total return rate = 0.03 + 0.03 + 0.014 = 0.074

Total return rate = 0.074 * 100 = 7.4%

The expected value of the total return rate for the firm's clients is C. 7.4%